OK I found a nice reference in the German Sturmowiki (hosted by
http://www.sturmovik.de)
here (German language of cause)
The dot will show in which direction you should correct the glidepath. If it's in the center you are on the right glidepath.
If there are too many friendly landingstripsnearby, or your distance to the strip is too big, it will show incorrect results.
The instrument is more sensitive in the horizontal than in the vertical.
The instrument will start working within a radius of 10 km of the airport. It seems the B25 and G4M1 Betty also have ILS instruments, but they don't work in the game - Ooooleg! lol